The Globe and Mail
, personal finance columnist Rob Carrick offered advice for parents who are considering funding their adult children’s real estate purchases: don’t.
“Can your kids actually afford to own a house? Helping someone buy a house he or she cannot afford to carry while saving for retirement and other things is irresponsible,” Carrick said.
Such advice has been seeing increased popularity, a development that brokers might need to be on the lookout for.
“The financial support you are offering your adult children is toxic,” financial planning professional Peter Dunn wrote in an open letter published in WFAA
. “You are hurting them, you are hurting yourself, and until you realize it’s not money that they need, everyone involved will feel the pain.”
Finance blogger Sean Cooper, who managed to fully pay his Toronto mortgage in just 3 years by living what has been called a “frugal existence” of minimal expenses and 100-hour workweeks, encouraged fellow millennials to consider this option.
Cooper added that his primary motivation for fulfilling the mortgage on his own was to prevent a repeat of his mother’s travails as a single parent more than a decade ago.
“I didn't want to be in that situation. I saw how tough it was on her,” he said.
According to a mid-April survey by Pollara commissioned by the Bank of Montreal, approximately half of first-time buyers are expecting to rely on their parents’ funds to account for around 12 per cent of their down payment costs.